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state, under his hand and the great seal of the state, shall issue to such bank a certificate reciting such resolution and declaring such increase or reduction to be authorized by law, and such certificate shall be prima facie evidence of such increase or reduction and of the authority to make the same in all courts of law. (Code 1916, c. 54.)

$ 5. Payment of stock.-- At least fifty per centum of the capital stock of every banking institution, organized under the provisions of this chapter, shall be paid in before it shall be authorized to transact any business, except such business as is incidental and necesarily preliminary to its organization. And the remaining fifty per centum of the capital stock shall be paid in full within the next succeeding ten months in monthly installments of at least ten per centum of the remaining fifty per centum of said capital stock. And in no case shall a bank or banking institution commence public business until it shall have received the certificate of authority from the commissioner of banking, as provided in section 29 of this chapter. (Code 1916, c. 54.)

$ 6. Personal liability of stockholders.--The stockholders of every bank heretofore organized or that may hereafter be organized, under the provisions of this chapter, shall be personally liable to the creditors thereof over and above the amount of stock held by them respectively to an amount equal to their respective shares so held for all liabilities accruing while they are such stockholders. (Code 1916, c. 54.)

$ 7. Directors; examining committee.-For every bank subject to the provisions of this chapter, there shall be a board of directors who shall have power to do, or cause to be done, all things that are proper to be done by the bank. Every director must own in his own right at least five shares of the capital stock of the bank of which he is a director, and before entering on his duties as such director he shall take an oath that he will, so far as the duty devolves upon him, diligently and honestly administer the affairs of the bank, and that he will not knowingly and willingly permit to be violated any of the provisions of the laws of this state relative to banking, and that the stock standing in his name upon the books of the bank is not hypothecated in any way to or pledged as security for loans obtained from or debts owing to the bank in which he is a director, and that the five shares necessary to qualify a stockholder as a director shall not be in anywise hypothecated, which oath, subscribed by himself and certified by the officer before whom it was taken, shall be filed and carefully preserved in the office of the commissioner of banking. Should a director at any time after his qualification as such, sell or dispose of, or in any way or manner hypothecate or pledge as security for loans obtained or debts owing, the said five shares, or any part thereof, necessary for his qualification, then his office as director shall immediately become vacant, and the remaining directors shall declare his office vacant and proceed to fill such vacancy forthwith. The stockholders of each bank shall annually appoint an examining committee, whose duty it shall be to examine the condition of the bank at least once every six months.

The examining committee shall report to the board of directors giving in detail all items included in the assets of the bank, which they have reason to believe are not of the value at which they appear on the books and records of the bank, and giving the value of each of such items as in their judgment they may have determined. The board shall cause said report to be recorded in the minute books of the bank, and à duly authenticated copy thereof transmitted to the commissioner of banking. Should the stockholders fail to appoint such committee, or should such committee fail to promptly make its report, then the commissioner of banking shall have the power, at his option, to appoint a committee to make such examination, and report. (Code 1916, c. 54.)

§ 8. Loans by bank on or purchase of its own stock.—No bank shall make any loan or discount on the security of the shares of its own capital stock nor be the purchaser or holder of any such shares, unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith; and all stock purchased or acquired in such manner shall, within six months from the time of purchase, be sold or disposed of at public or private sale. (Code 1916, c. 54.)

§ 9. Limit on loans to one person or company.—The total liabilities to any bank or trust company of any person, or of any company, corporation or firm, for money borrowed, including the liabilities of the company or firm, the liabilities of the several members thereof, shall at no time exceed twenty per centum of the capital stock, plus the surplus fund and undivided profits. But the discount of bills of exchange drawn in good faith against actually existing values, and the discount of commercial or business paper actually owned by the person negotiating the same, shall not be considered as money borrowed. The corporation mentioned in this section shall not be construed to mean municipal corporations, districts or counties. (Code 1916, c. 54.)

§ 10. Bank dividends.—The directors of any

bank

may an, nually, semi-annually or quarterly, declare dividends, but such bank shall, before the declaration of any dividend, carry onetenth part of the net profit accrued to its surplus fund until the same shall amount to twenty per centum of its capital stock. No dividend shall be declared except from earnings remaining after deducting all losses, all sums due for expenses, and all over-due debts upon which no interest has been paid for a period of six months, unless the same are well secured and in process of collection. Any director voting for any dividend in violation of the provisions of this section shall be deemed guilty of a misdemeanor and upon conviction thereof shall be fined not less than five hundred dollars, and in the discretion of the court, confined in jail not less than thirty days. (Code 1916, c. 54.)

$ 11. Impairment of bank capital.--No bank, or any of the officers or directors thereof, shall during the time it shall continue its banking operations, withdraw, or permit to be withdrawn, either in the form of dividends or otherwise, any portion of its capital stock. Whenever the capital stock of a bank has become impaired, by losses or otherwise, it shall be the duty of the board of directors to restore the same within three months by an assessment pro rata on the stockholders, on the amount of the capital stock held by each. But nothing in this section shall prevent the reduction of the capital stock of the bank, as provided in section four of this chapter. (Code of 1916, c. 54.)

$ 12. Failure to pay stock assessment or cure impairment of capital.-If any stockholder or stockholders of a bank shall neglect or refuse after three months' notice, to pay the assessment as provided in the next preceding section or in section five of this chapter, it shall be the duty of the board of directors to cause a sufficient amount of the capital stock of such stockholder or stockholders to be sold at public auction, after thirty days' notice shall have been given by posting such notice of sale in the office of the bank, and by publishing such notice in a newspaper of the city or town in which the bank is located, or in a newspaper published nearest thereto, to liquidate the deficiency, and the residue of the proceeds of said sale, if any, shall be paid to the delinquent stockholder or stockholders. A failure by the board of directors to make the assessment provided for in section eleven to cure an impairment of capital stock, or failure to carry out the provisions of this section, shall make the members of the board of directors subject to the penalties prescribed in section twenty-seven of this chapter. (Code 1916, c. 54.)

$ 13. List of bank stockholders. The president and the cashier of every bank or association shall cause to be kept at all times a full and correct list of the names and residences of all the stockholders in the bank or association, and the number of shares held by each, in the office where its business is transacted. Such list shall be subject to the inspection of all the stockholders and creditors of the bank or association and the officers authorized to assess taxes under state authority, during business hours of each day in which business may be legally transacted. A copy of such list on the first Monday of July of each year, verified by the oath of such president and cashier, shall be transmitted to the commissioner of banking. (Code 1916, c. 54.)

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$ 14. What is "bank” or “banking company.”—The words “bank” or “banking company” in this act shall be taken and construed to include any bank, banker, banking company or trust company. (Code 1916, c. 54.)

§ 15. Reserve fund of banks.-All banks operating under the provisions of this chapter shall at all times maintain on hand as a reserve in lawful money of the United States, an amount equal to at least fifteen per centum of the aggregate of all its deposits which are subject to withdrawal on demand; and whenever said reserve of any such bank shall fall below said per centum of such deposits it shall not increase its liabilities by making any new loans until the required proportion between the aggregate amount of such deposits and its reserve fund shall be restored; provided, that in lieu of lawful money on hand, three-fifths of said fifteen per centum may consist of balances payable on demand due from any national or state bank doing business in this state, or any solvent banking institutions outside Acts of 1919, Chapter 60, added to Chapter 54 of Barnes Code of 1916, section 79 a(11) which provides among other things:

"A compliance on the part of any such bank or truet company" (one becoming member of Federal Reserve) nwith the reserve requirements of the federal reserve act shall be held to be a full compliance with those provisions of the laws of this state which require banks or trust companies to maintain cash balances in their vaults or with other banks, and no such bank or trust company shall be required to carry or maintain reserve other than such as is required under the terms of the federal reserve act."

$ 19. Commissioner of banking ; scope of powers. The commissioner of banking shall have jurisdiction and control, as hereinafter provided, over all banks chartered by and operated in this state, and all other institutions mentioned in this act. (Code 1916, c. 54.)

$ 20. Same: appointment; assistants.-On or before the first day of April, one thousand nine hundred and fifteen, or as soon thereafter as possible, and every four years thereafter the governor of this state shall designate and appoint some competent person commissioner of banking, who is a citizen of this state, and who shall be experienced and skilled in the science of bookkeeping and banking, and who shall have had at least two years' experience as a cashier or an assistant cashier of a bank, or shall have served at least two years as assistant commissioner of banking, bank examiner or as an accounting officer of the state, and who is neither directly nor indirectly interested in any bank or

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